Luxury sourcing challenges tackled through collaboration

Luxury and premium apparel firms across Europe are finding that when it comes to boosting their competitive edge there is strength in numbers, with a unique collaborative approach to their common sourcing difficulties seeing them team up and work together as part of a new 'High End Fashion Cluster'.

The luxury and premium end of the apparel industry - where production focuses on highly complex garments and low order volumes that might involve just three pieces per style - faces a very different set of production problems to the mass-market where cost is invariably the first priority.

"The big challenge in premium apparel sourcing is that the traditional manufacturing clusters have disappeared or lost their competitive edge," explains Jan Hilger, director of operations at Escada.

"95% of the fabric we use in tailored women's wear comes from Italy, but the number of apparel manufacturers who can handle these materials has reduced massively in recent years. The strength of a cluster is its effect on innovation.

"If you place various players close to each other they inspire competition - like in a sports tournament; if you have less players the pressure decreases, and as a consequence the innovation goes down, which is becoming one of the major bottleneck problems in sourcing premium and luxury apparel.

"With every cluster dying, and with every producer closing, we lose competence. On the other side, in the luxury business the product requirements are growing exponentially; there are new materials, new combinations, and new manufacturing methods to try out."

Having established that suppliers, manufacturers and other high end brands were facing similar sourcing challenges, especially in tailored women's wear, Hilger initiated talks to set up the 'High End Fashion Cluster' within which the firms could team up and work together.

"When we put ten women's wear brands together we suddenly have the volume of ten women's wear brands - and the importance," Hilger explains. "We have been doing this for one and a half years and it's working very well."

The initiative has seen Escada's clothing technicians, for example, inspect products for other brands participating in the cluster. "We even combine shipments, do workshops on several technical topics and have a growing number of brands in the project."

Additional benefitsAs well as building business relationships in manufacturing and logistics, the group is exploring other benefits too.

"We are currently working on a project to agree on a common standard for fabric defect evaluation in the premium segment, that would speed up inspection routines in Italy and give a lead time advantage to all participants," Hilger tells just-style.

"We are also working on common ideas for efficiency improvements in factories by agreeing and developing manufacturing standards; and we are extending the network of skilled premium apparel manufacturers in Eastern and Central Europe to foster the exchange and collaboration between them.

"A first initiative is a joint project of six apparel manufacturers from Austria, Germany, Romania, Slovenia, Macedonia and Croatia to increase the attractiveness of sewing jobs and find ways to enhance the reputation of the profession to attract young people and talent back into the factories.

"As the sewing industry depends on skilled and trained professionals, the lack of youth in many factories has become a serious issue which can relate to the reputation of sewing in a factory in general."

Overwhelming supportAlthough the idea of competitors working together towards a common cause was an anathema for many in the industry, support for the initiative has in fact been overwhelming.

"When I proposed the idea for a collaborative approach for the first time in March 2011, I received a lot of positive feedback.

"As I wanted to test the "real" interest in the initiative, I set up the first meeting in our competence centre in Slovenia" - which for most attendees required a journey of at least five-hours each way as well as a commitment to give up one-and-a-half days' of their time.

"Of the 32 people I invited, 28 participants showed up plus one extra guest." The initial group has now grown to 62 members with more joining each month, and represents high-end and luxury apparel firms from Germany, Italy, Austria, Switzerland, France and the UK.

With collaboration at its heart, the Cluster first and foremost requires its members to "have the right mindset", a willingness to work together, and the drive to move things forward. There are also certain rules when it comes to sharing internal company information to exchange data for benchmarking purposes.

"The company is the entry ticket, but the group is composed of individuals. If people do not fit, play unfairly, or do not show initiative, we ask them to re-think their participation or even remove them.?

"Most of the members knew each other before we started the Cluster, but we have new members at every meeting and it is amazing to watch how fast people integrate and become part of the team.

"As we are not a formal network, there's no official integration process, so we would always invite new entrants to get to know each other first and see if there's a common link."

Manufacturers who apply to join the group are first filtered and assessed by one of the moderators before being given access to offer their capacities and services.

"As we want to foster and protect the knowledge of garment manufacturing in Europe, the priority is on European apparel and accessories manufacturers," Hilger says.

He adds: "The time is right for new ways of working together, and what we are doing in the premium and luxury segment seems to be one solution to tackle some of the problems."